Innovating from the Other Side: Unleashing the Power of Demand-Side Thinking

Innovating from the Other Side: Unleashing the Power of Demand-Side Thinking

Spring 2019

By
Tim Fish
and Jackie Wolking

Innovation can often seem like an exhausted and conveniently ambiguous word—this is true in business, nonprofits, and certainly in independent schools. Yet, perhaps it’s appropriate that the word is equivocal in nature as innovation should capture a constant state of change that cannot simply be determined by one person, in one context, in a universal way. Each organization needs to view innovation in its own context—compared to its mission, vision, and values, as well as its market realities. At its core, innovation is a disposition informed by consensus and clarity around who you are and who you serve.

We know our schools are under increasing pressure to reimagine themselves in ways that effectively blend their mission with a changing market. Our schools are facing affordability issues, enrollment challenges, an evolving understanding of what defines great teaching, and an imperative to better define and hone their value proposition. In the years following the most recent recession, tuition growth at independent schools outpaced both the inflation rate and growth in income, reducing school affordability for all but the highest-income households. Nearly half of NAIS member schools reported declining enrollment between 2013 and 2018, and overall, schools were less selective in 2017–2018. The student population is changing as well. Generation Z (born after 1996) is more diverse than prior generations and their tech-infused upbringing drives an “anytime, anywhere” approach to learning, which is certainly influencing broader educational trends.

These are just some of the forces that are creating the imperative for strategic innovation. Yet with these struggles comes opportunity—constraints often unleash the greatest creativity in our schools. That’s why we created the NAIS Strategy Lab. We want to help schools develop processes to move away from random acts of innovation. Innovation design works best when it begins with a deep exploration of a school’s unique identity and how this aligns with the progress parents and students are trying to make. It also requires the courage to call out the complex internal and external struggles acting on a school and the willingness to do the hard work necessary to move a school forward.

With Strategy Lab, we are partnering directly with schools to co-create a new vision for strategy and action. Our tools and frameworks are designed to help schools unpack challenges and opportunities, align them to what parents really want, and design mission-centered solutions grounded in clear outcomes and metrics. We call this process demand-side strategic thinking.

Creating a New Understanding

Over the past two years, the innovation team at NAIS has worked with more than 165 schools to understand their unique journeys. One of our greatest learnings and observations is that many schools are innovating from the supply side: They are creating new programs or expanding upon what they already offer in an effort to stay competitive or deliver on what they think their parents and students want. They might launch a makerspace, build a new library, or introduce a new pedagogical model without fully understanding how the innovation aligns with what’s truly driving parents to choose their schools. Focusing on the supply-side of innovation in this way without fully understanding demand can often lead schools to invest in programs or facilities that may or may not increase interest in the school.

Demand-side strategic thinking, on the other hand, is rooted in Harvard Business School professor Clayton Christensen’s Jobs-to-Be-Done (JTBD) theory. When applied to schools, JTBD focuses on identifying causal evidence driving decisions to “fire” one school and to “hire” another. JTBD theory focuses less on the demographic characteristics of the parents—their age, gender, marital status, education level, income—and more on the context they are in, the struggles they are having, and the progress they are trying to make.

Over the last year, NAIS started sharing our story of the “Jobs” we’ve uncovered about why parents hire our schools. In presentations across the country, webinars, and the Winter 2019 issue of Independent School, we shed light on the deep research process we went through using JTBD and how we conducted and analyzed numerous interviews with parents from all over the country. Our research, which we designed and implemented in partnership with The Re-Wired Group, a consultancy that specializes in developing new products and services using JTBD methodology, found four reasons parents “hire” our independent schools. These findings provide schools with the perspective and foundation they need to start designing meaningful, market-driven action plans that are aligned with the school’s mission.

Using Systems to Strategize

Once schools understand JTBD and demand-side thinking, they can begin to design innovations that align with their mission and truly resonate with families. The process begins with identifying the root causes of the problems the school is trying to solve and then systematically designing small projects to prototype and iterate. This latter part involves systems thinking, and it’s an approach we believe is helpful for innovation design.

At a very basic level, systems thinking is a framework that breaks down a whole into its parts to define each one and identify the cause-and-effect relationship between the different parts of the system. In the NAIS Strategy Lab, we have found that this fosters strategic problem-solving by mapping the various parts of a school backwards from:

1. Why families hired the school and how they will determine success, to
2. How the school plans to measure success, to
3. The school’s intended outcomes to meet those metrics, to
4. The work the school performs to achieve the outcomes, to
5. The resources the school will use to make the work happen.

All the while acknowledging that this is being done within the greater context of the external forces acting on the school that may be difficult or costly to control.

We call this designing from right-to-left: from the demand-side (parent JTBD) to supply-side (what mission-aligned resources the school can use to take action). For an example of how we integrated parents’ JTBD within a school system, see image below.

Although we’re describing the framework here in a linear fashion, it’s often a cyclical process that allows a school to synthesize the cause-and-effect connections between these parts and ultimately create new ideas to test and implement. Often the ideas that demand-side strategic thinking uncover don’t seem incredibly novel, or even cutting-edge enough to fit into our hackneyed definition of “innovation.” Yet we have found that schools that can master the process of designing and implementing multiple demand-side innovations have the greatest potential to transform a school over time. Demand-side strategic thinking is a capability that can be learned and mastered. Leadership teams that are armed with this know-how are better able to unpack challenges, assemble teams, and leverage resources to deliver on clear goals and measurable outcomes.

Strategy in Action

In our pursuit to put these theories and frameworks into practice through the NAIS Strategy Lab, we’ve partnered directly with schools over the last six months and worked with them during a series of in-person workshops. Charles River School (MA), is one of them.

Charles River School (CRS) lies on the western outskirts of Boston, serving just under 200 students in grades pre-K through 8. Since the school’s founding in 1911, it has maintained a strong focus on educating the whole child and provides a values-aligned community committed to academics as well as the social and emotional development of their students. Yet CRS finds itself in one of the most highly saturated independent school markets and competes with one of the strongest public school systems in the country. And like many independent schools, CRS is challenged by a smaller number of families seeking an independent school education. Although the school has made significant progress in recent years, cutting attrition by half and creating a culture of happy and engaged stakeholders, attracting new families is its primary challenge.

In joining the NAIS Strategy Lab workshop, CRS participated in JTBD research to uncover which Jobs parents hire their school to perform. The research illuminated that the school serves Jobs 1, 2, and 3, which reaffirmed their commitment to whole-child education. However, it also highlighted an opportunity to increase engagement with Job 4 families. CRS unpacked its challenges, which included brand awareness, attracting new parents, and specifically attracting different types of parents. Understanding different parents’ context—the struggling moments they experience, their habits and anxieties, and the tradeoffs they are willing to make when switching from one school to another—helped CRS uncover the root causes of its challenge to attract certain kinds of parents.

Early on, the CRS team grasped that JTBD and systems thinking would be a useful tool to design programming and events tailored to the needs of current and prospective parents. In particular, they saw opportunities to make connections between specific CRS programs that were siloed but could be weaved together to form an engagement that was rigorous for students, meaningful to Job 4 families, and maintained alignment with the school’s mission. After attending the Strategy Lab workshop, the school decided to modify its plans for a community outreach project in partnership with the local public library that was already in the works. The resulting redesign of the project will now highlight CRS’s approach to STEAM, its use of teaching methodologies from prestigious universities such as Stanford and MIT, and how the skills children will learn on campus will prepare them for success in high-performing secondary schools. When CRS launches the project, the intentional demand-side strategic thinking approach will ideally prompt a successful dialogue between CRS and a parent population they have historically not been able to engage effectively.

While CRS’s prototype seeks to help them become a school that addresses all four parent Jobs, this might not be the case for all schools. Using a demand-side innovation approach does not mean that schools must be all things to all people. Rather the process will look different for each school, depending on its market, unique identity and offerings, and the parents it serves or wishes to serve.

Reimagining for the Future

In a recent Independent Ideas blog post, NAIS President Donna Orem writes, “the changes in the 21st century marketplace provide opportunity to think differently about how independent schools can best serve families, but we need to act quickly and we need to become more comfortable with risk.” This speaks loudly to the environment independent schools are navigating—and the reimagination process that the independent school community is engaged in.

As more and more schools face challenges that drive an imperative to change, demand-side strategic thinking can be the catalyst for transformation. There likely will not be one single solution that solves for all the forces acting on a school. But a deeply informed strategy can certainly be the repeatable formula that supports schools on their innovation journeys.